2002 Outlook: Basell targets growth in central Europe

09 January 2002 16:30  [Source: ICIS news]

LONDON (CNI)--Basell intends to target polyethylene (PE) and polypropylene (PP) growth potential in central Europe in 2002.

The European polyolefins major said it plans to grow internationally in the emerging markets - Asia, Middle East, South America and central Europe - and sees significant potential in central Europe for its PE and PP 'volume' business.

Basell will also concentrate efforts in 2002 on its synergy programme and its "scrap and build" asset rationalisation strategy.

The synergy programme led to more than Euro100m ($89m) in cost savings in 2001 and is expected to deliver Euro200m in savings this year, according to a Basell spokesman. The group remains on track to deliver savings of Euro250m/year by the end of 2003.

Faced with over capacities in Europe and North America, Basell is rationalising its production assets. It plans to close its PP and compounding plants in Wilton, northeast England, and to shut two PP plants in Tarragona in Spain.

The company plans to raise the proportion of feedstocks taken from its parent companies Shell and BASF, particularly for PP. Shell has said it wants Basell to take more than 70% of its PP feedstocks from its parents compared with current levels of 50%.

Basell's president and chief executive Volker Trautz said: "We will go into 2002 leaner and stronger and continue to be optimistic about traditional growth rates returning to polyolefins."

He noted that 2001 was a difficult year for polyolefins "but we made progress at Basell by achieving our merger synergy targets and improving our cost performance".

Basell expects PE demand to rise 3% in Europe this year and PP demand to rise 3.5%. In North America, demand for both PE and PP is forecast to increase 5%, while in South America PE demand is forecast to grow 6.5% and PP demand is expected to rise 8%. Asian demand for PE and PP is expected to grow 7% and 6% respectively.

The company said it wants to focus on its research and development (R&D) efforts to introduce new products and technologies, citing the start-up of its multizone circulating reactor (MZCR) in Brindisi, Italy in Q2-2002. The MZCR technology is being retrofitted at the company's 180 000 tonne polypropylene (PP) plant.

Potential areas for expansion include licensing of complete polyolefins processes and catalyst supply through the introduction of its Avant catalyst systems for PP. Basell noted that its licensing business will target growth in the Middle East, Asia and Russia.

The group also wants to expand its e-business activities for its PE and PP 'volume' business.

By: Anna Jagger
+1 713 525 2653

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